Importance of Focused System Demonstration in ERP Selection

One of the critical success factors in ERP system selection is the inclusion of a focused ERP system demonstration of the shortlisted systems as part of the evaluation process.

System selection methodologies will always set time aside for requirements elicitation and preparation of an Invitation to Tender (ITT). However, it is now also considered best practice in ERP system evaluation to ensure that potential users see a demonstration of the vendor’s software.

Any ERP demonstration must be relevant to the business. For example, there is little value in demonstrating a discrete manufacturing functionality to an organisation that manufactures product from ingredients that may vary slightly on a daily basis and may result in by-products and co-products. In such a situation there is a requirement for software that is designed for the chemical or food processing industry. Focused demonstrations must also be of sufficient detail to allow a company to seriously compare ERP systems. Some vendor led demonstrations tend towards very simplistic situations and processes. For example an order to cash process might be shown where a customer orders, at a fixed price, a quantity of finished goods that are fully in stock. The reality in business is that there are many customers with varying and more complicated commercial arrangements (such as BOGOF, LTAs and complex pricing discount tables) and these scenarios need to be seen in a demonstration. Potential users should also be interested in seeing how the system might handle scenarios such as stock-outs and incomplete payments. On the other hand, there is a delicate balance between asking for detailed test scenarios and inadvertently forcing vendors to opt out of the selection process due to the extent of preparation required.

However, Lumenia have found that many businesses don’t have the internal expertise to identify the type and depth of scenarios that must be demonstrated. In such a situation, it’s advisable to seek external and objective assistance of independent ERP consultants.

A typical ERP system will underpin the operations of an organisation for a period of at least ten years. Businesses that don’t include focused demonstrations in their ERP selection process are in grave danger of selecting the wrong system and are effectively putting the future viability of their organisation at risk.

This blog was written by Martin Commins, Principal Consultant.  If you would like further information please send an e-mail to Martin Commins.